Multifamily Affordable Housing

ArentFox Schiff has extensive experience with senior loan financings (both construction and permanent), mezzanine financing, local governmental financing, tax-exempt financing, low-income housing tax credits, seniors housing, securitized financings and negotiating joint venture agreements among the equity holders of the projects.

Our practice includes projects in all 50 states and the District of Columbia. Work in the multi-family field has necessarily entailed representation of clients in complex work-out scenarios and financial restructuring, work with municipal financial structures, and also related tax and regulatory work.

Affordable housing is a core area of practice for the Public Finance Group. Our work has recently included lobbying Congress to protect the interests of the not-for-profit community in retaining their interests in affordable housing projects.

Representative Work

• Represent a national credit provider with a forward commitment for, and permanent financing of, a 400+ unit multi-family mixed-use property in the Southwest/Waterfront neighborhood of the District of Columbia and adjacent to the Waterfront Metrorail station.  The project involves affiliated borrowers receiving 4% low-income housing tax credits (LHTC), 9% LIHTCs and market rate housing, interspersed within one building, with no discrete portions of the building owned by any one affiliate.  AFS has assisted this client provide long-term financing for several transit-oriented developments, including, for projects in East Orange, NJ adjacent to Brick Church train station and in New Rochelle, NY near the New Rochelle Metro North train station.
• Represent a national credit provider in providing 30-year mortgage loan enhancement for bond-financed loans to public-private JV co-borrowers.   The borrowers lease (99 years) public housing projects from a major urban housing authority and convert thousands of public housing units across multiple development sites from public housing to be preserved as long-term affordable housing that undergoes substantial tenant-in-place rehabilitation and improvement involving blended RAD conversion and Section 18 project-based voucher  HAP Contracts from the U.S. Department of Housing and Urban Development (HUD).
• Represented a national credit provider in providing long-term financing for a portfolio of over 20 separate multifamily rural housing properties, increasing the distribution of investment capital available for mortgage financing for very low-, low-, and moderate-income families in rural communities.  Each loan in the portfolio was small, only four were more than $3 million and three were under $1 million—making them uneconomical to finance separately.  The properties benefited from multiple sources of funding, including USDA Section 515 subordinate loans, bond financing, subordinate housing agency and non-profit loans, as well as LIHTCs.   Loan proceeds were used to upgrade the properties.  This financing took nearly a year to implement given the number of properties, borrower entities and financing sources.
• Represented a national credit provider in providing bond credit enhancement for multifamily housing bonds (Bonds), proceeds of which were used to provide long-term financing for an affordable housing condominium unit containing 107 low and very-low income rental apartments (Affordable Unit).  The Affordable Unit is part of a mixed-use condominium building containing a cultural arts center and more than 250 for-sale, luxury condominium apartments.  The residential units at this site and a nearby site benefit from a 20-year, phased property tax exemption due to the affordable housing units located in the Affordable Unit. In exchange for the property tax abatement, the for-sale units are obligated to pay, as part of their condominium assessments, an amount to cover Bond debt service and the for-sale unit owners at the subject property are also obligated to make up operating shortfalls, if any, of the Affordable Unit.
• Represented a District of Columbia non-profit in the acquisition and financing of several projects, including developing a joint operating agreement model to avoid adverse tax consequences in a transaction where the non-profit collaborated with other nonprofit organizations and used tax-exempt bonds to reduce cost.
• Represented a District of Columbia non-profit in acquiring an 825-unit apartment project in Arlington, Virginia. The transaction was financed with a senior loan provided by the housing equity fund of a multinational technology and e-commerce company and a mezzanine loan provided by a DC housing initiative impact pool.
• Represented a joint venture of two non-profits in the acquisition and senior, mezzanine and local county trust fund loan financing of a 245-unit apartment complex in Hyattsville, MD. Negotiated 20 years of property tax abatement through a “Payment In Lieu of Taxes” property tax abatement agreement with the local county.
• Represented a joint venture of of two non-profits in the acquisition and senior, mezzanine and local county trust fund loan financing of a 140-unit apartment complex in Silver Spring, MD.   Negotiated 15 years of property tax abatement through a “Payment In Lieu of Taxes” property tax abatement agreement with the local county.
• Represented a District of Columbia non-profit on its acquisition and senior and mezzanine financing of a 214-unit multifamily community in the District of Columbia, boosting the non-profit’s long-term, programmatic strategy to acquire and preserve naturally occurring affordable housing in the DC region to stabilize rents and prevent displacement. AFS assisted the client obtain tax relief certification enabling it to proceed with the acquisition subject to reduced transfer and recordation taxes.
• Represented a national housing partnership and its affiliate, along with regional developers on the acquisition and disposition and financing, predominately using tax-exempt bonds, of dozens of affordable apartment buildings nationally and regionally, which work included workouts and restructurings including several times on a portfolio basis.
• Represented a county government in connection with a public-private partnership with a real estate developer to construct residential apartment building workforce housing on county property utilizing state tax-credit financing.
• Represented a county government in connection with developing and rehabilitating a historic preservation site to convert historic buildings to affordable multifamily apartment units and developing the horizontal county-owned infrastructure.
• AFS a formed two housing nonprofit organizations focused on preserving low- and moderate-income housing for projects ending LITHC restriction periods; drafting the formation documents, the application for and receipt of recognition of tax-exempt status from the IRS and counseling on various tax related and state law related conflict of interest issues. AFS also drafted the organizational documents and application for recognition of tax-exempt status for a nonprofit focused on providing housing for health care workers, in two of these cases successfully expanding the basis for recognition of tax-exempt status beyond published authority.
• Represented a national nonprofit in connection with financing the leasing, construction and renovation of dormitory and residential facilities at a District of Columbia university.
• Served as underwriter’s counsel for a student housing project for a university in the suburbs of Washington, DC. The project consisted of 267 student residential units available to the University under a concession agreement with the project owner.
• Represented a university in the development of a two-dormitory project. Responsible for drafting and negotiating the construction documents, the project’s financing by the developer, and purchasing the project by an affiliate of the university upon completion.